Environmental Economist

Imagine it is a warm fall day, the sun gleaming off the yellow and gold poplar leaves and the deep green of the neighbouring pines. You are perched on the edge of a slope looking 10 metres down into a beautiful river valley. You are an environmental economist and are tasked with assigning a monetary value to this area.

Last month, a developer approached the municipality for permission to subdivide the land around the river valley and build expensive retirement estates. But, before the municipality decides, it has asked you to evaluate the economic consequences.

This is a complex job, but it is what you are trained to do.

As an environmental economist, you will approach this problem using a variation of the traditional cost-benefit analysis, whereby you outline all the potential benefits to the municipality if it agrees to allow this development, as well as the possible costs.

On one hand, you outline the potential revenue gain for the municipality as a result of increased property taxes. You also calculate the benefits of increased economic growth in nearby communities that would result from a large construction project like this one.

On the other hand, you need to evaluate the project’s cost in terms of environmental impact. This is the tricky part: the environment does not have an easily defined dollar value.

As part of your comparative analysis, you will use valuation tools and methodologies to assign a monetary value to the river valley’s environmental assets.

You will determine the cost of removing half the area’s trees, destroying wildlife habitat, and increasing soil erosion, as well as the cost of the air and water pollution that would result from the construction project.

In addition, the new development would restrict access to the river; you must calculate the potential cost to tourism, outdoor recreation, and the quality of life of nearby residents.

As an environmental economist, you are responsible for quantifying the environmental impact of the new development so it can be compared to the monetary gain.